Location: Dierdorf, Germany
Sales: $89 million
Description: Key Personnel
Michael Haddon, managing director
Dry laid, chemical bonded, thermal bonded, needlepunched, air through bonded
Paratherm, Paramoll, Paraskin, Paradur, Paraprint, Parabond, Parafil, Paratherm loft, Paraform
Automotive, interior decoration, gas and liquid filtration, medical, hygiene, roofing, shoe and leather goods, conveyor belts
Under new ownership this year is nonwovens producer Lohmann Vliesstoffe GmbH, Dierdorf, Germany, whose roll goods sales have increased significantly thanks to its alliance with needlepunch producer TWE Group, Emsdetten, Germany. TWE purchased Lohmann, a producer of drylaid, chemical bonded, resin bonded, needlepunched and air through bonded nonwovens, in July 2001. Additionally, Lohmann has experienced organic growth through a continued strategy of focusing on a limited number of key projects at a time.
Before its purchase, Lohmann Vliesstoffe was a part of the larger Lohmann Group, a business conglomerate. Unlike TWE Group, the Lohmann Group’s wide range of market segments made the nonwovens division only a small segment of its business. The purchase by the TWE Group has allowed Lohmann to become a part of a company that focuses on only one core business—nonwovens. “Now we have a partner in the nonwovens industry that understands the industry,” explained Michael Haddon, managing director of Lohmann. “This was never the case before. Nonwovens was never considered a core business.”
While Lohmann and TWE continue to operate legally as two separate businesses, the two companies benefit from the many synergies that exist between them. Currently, about 10% of the companies’ total businesses cross over to each other, but company executives expect this percentage to increase as time goes on.
Looking at Lohmann separately, the company has been able to continue its strong track record of market penetration, begun three years ago, by adopting a strong market focus and relying on core strengths. To date, this strategy has enabled the company to more or less double its turnover in only three years. Some of this growth has been achieved through capital expansions including a new needlepunch line, built last year, that doubles the company’s capacity in this segment.
Company executives expect further capacity expansions to be examined in the future. “It’s good for the future of the company to build a new line in whatever technology we see fit,” Mr. Haddon said. “We are already starting to play with a few ideas.”
In addition to capital expansion, Lohmann’s sales have increased through a consolidation plan that brought the number of the company’s penetration markets from 15 to five. Instead of focusing on an excessive amount of projects that are going nowhere, the company focuses only on 10 projects, five on an “A-list” and five on a “B-list.” Once one project is complete, another one is added to the list.
Currently, about 40% of Lohmann’s nonwovens sales are conducted within the hygiene market. Despite the problems that have existed in that market for nonwovens in recent years, Mr. Haddon described 2001 as a good year for its hygiene business, which reaped the full benefits of Lohmann’s business strategies.
In addition to hygiene, Lohmann’s technical applications include construction, automotives and wet filtration. While niche markets continue to be an interest, they can be difficult to maintain, according to Mr. Haddon. “The problem with a niche market is that you find that once you develop them, somebody comes along and challenges you with a cheaper product,” he said. “The nonwovens industry can be an aggressive market in that way.”
In terms of production capabilities, Lohmann can produce 13,000 tons of nonwovens annually. This capacity is split between needlepunching (30%), resin bonding (30%) and air through bonding (40%). Currently about 11-12,000 tons of Lohmann’s capacity is fully utilized, leaving some room for organic growth.
Among the company’s not-yet-finalized plans for future expansion are a thermal bonding line and additional needlepunch or resin bond capacity. “If everything goes as planned, we will have to add some capacity at some point,” Mr. Haddon predicted.